The DC Policy Center recently published an article that takes a misleading and evasive look at our proposed carbon pricing policy. The article fails to come up with an alternative to tackling climate or to allow DC to achieve its 2032 or 2050 climate goals, and it’s worth considering the interests behind this think tank — executives from Pepco, the D.C. Chamber of Commerce, and development companies sit on the board.

Regardless, the article has several failings, some of which we will to respond here.

DC Policy Center starts with a presumption that pricing must hurt the economy, and ignores (rather than rebuts) our analysis.

DCPC pins its position on the categorical presumption that the “tax revenue, no matter how high and however it is used, will not be sufficient to cover the cost of lost wages and income or the economic activity that drains away from the city.” They offer no support for this presumption – and certainly no analysis of how alternative uses of the revenue would affect the economy. They then wave away a year of intensive design work, stakeholder engagement, and analysis as “a lot of modeling and number crunching,” which they reject without any further reference or substantive critique. DCPC appears to simply be disbelieving, on ideological grounds, the possibility that this policy could be anything other than bad for the economy.

DC Policy Center cites two sources for their presumption of economic loss. Both sources actually support the coalition’s proposal, rather than casting doubt on it.

In The Impacts of a Carbon Tax, Resources for the Future authors point out the potential for well-designed carbon prices to boost employment while limiting economic losses to a few exposed sectors. This is exactly the assessment we presented, when we said the policy could add about 500 net jobs while driving some losses to the utility and professional-service sectors.

The authors point out that “…the employment effects represent much more of a shift in employment—fewer jobs in one sector but more jobs in the other—rather than a change in overall employment.” This is entirely consistent with the coalition’s analysis, and entirely inconsistent with DCPC’s presumption that any such policy must be bad for the economy.

The authors also emphasize the benefit of designing the policy carefully to meet priorities, which directly contradicts DCPC’s assertion that any carbon price is beyond saving from an economic-impact perspective. Specifically, they never say that the price impact is too large for any use of the revenue to repair, and DCPC misrepresents their work by saying they do.

In Effects of a Carbon Tax on the Economy and the Environment, the CBO says plainly, and right up front, “The effects of a carbon tax on the U.S. economy would depend on how the revenues from the tax were used” (italics added). This completely contradicts DCPC’s gloom-and-doom guarantee of economic loss regardless of how revenues are directed. The CBO makes no statement that the burden of the price is automatically larger than the benefit from revenue re-use. DCPC again misrepresents the authors by stating that they find carbon prices to be inevitably more damaging than any use of the revenue could repair, when they say no such thing.

DC Policy Center ignores basic and well-documented opportunities for economic gains through a) reduction of imports and b) shifts in spending to more labor-intensive areas.

DCPC ignores the potential for this policy to reduce imports and redirect resources domestically, but that’s a crucial aspect of any local economic analysis. In the case of the District of Columbia, which imports almost all its energy, a policy that reduces energy spending while stimulating consumers to spend money locally with the money instead absolutely has the potential to expand the local economy.

Also, energy sectors tend to divert a very small amount of each dollar spent to actually hiring people. In DC, where we import energy, almost no energy-industry employment is inside our boundaries. By contrast, the sectors that benefit from residents spending their rebate – restaurants, retail, basic health care, etc. – tend to operate in the District and tend to spend a lot of their revenue hiring people. It is this shift which underlies our assertion that the policy has the potential to expand employment rather than force a contraction.

DC Policy Center characterizes revenue-return strategy as cynical politics rather than legitimate economic stimulus.

Groups left, right and center focused on pricing carbon agree that boosting consumer spending will stimulate the economy. Groups opposed to rebates nevertheless focus on payroll-tax reductions in pursuit of the same effect – increasing consumer spending capacity. Both George W. Bush and Barack Obama made some form of a more-cash-in-pockets approach (Bush relying on a direct rebate check, Obama on a payroll-tax reduction) a part of their respective strategies for recovery from the dot-com bubbles and the financial crisis. This is basic economic strategy, not political trickery.

DC Policy Center makes blatant errors when discussing the Maryland carbon fee bill 

The author completely mis-characterizes the Maryland carbon fee bill. The bill was introduced in early 2018 in the House of Delegates only — not the Senate as DCPC asserts. And the House sponsors explicitly intended the bill to be for “educational” purposes only during the legislative session that ended in April. There was a packed and positive House committee hearing, but final passage was never pushed by the sponsors who intend to bring it back next year with growing support for a serious push for passage in 2019.

DC Policy Center didn’t even get our name right!

The author repeatedly characterizes the proposal as coming from “Chesapeake Climate Action Network.” But the “Put a Price on It, DC” campaign was co-founded and actively co-led by a large number of the District’s leading environmental and social justice organizations including the Sierra Club DC Chapter, Citizens’ Climate Lobby DC, Interfaith Power & Light (DC.MD.NoVa), and DC Environmental Network. It has since gained support from dozens of additional organizations and businesses, now totaling more than 70 coalition members.  Additionally, the economic analysis DCPC disparages was conducted separately by the Center for Climate Strategies.

We know that a carbon fee-and-rebate is the best way to bring D.C. to a renewable-based economy in a way that will benefit everyone. Sign and share the petition, call the Chairman, and join the movement.

Last year DC Mayor Bowser made a pledge to not only the people of DC, but to the citizens of the world. This pledge was her commitment to the Paris Climate Accord.

The pledge included a vow to reduce DC Greenhouse Gas (GHG) emissions by 50 percent by 2032 and 80 percent by 2050 compared to 2006 levels. Mayor Bowser continued to push expectations higher by pledging to make the District carbon-neutral by 2050 and by joining other cities in the C40 group.

All of these ambitious targets require a plan, and in 2016 the DC Department of Energy and Environment (DOEE) released its Clean Energy DC plan. This is an outline of how the District can reach decarbonization by 2050. Unfortunately, it is only an outline and accomplishing the ambitious goals set by Mayor Bowser will require swift legislative action. Legislative action that creates and develops the necessary mechanisms for success.

It has been made clear in the weekly Working Group meetings that we are not on track to meet the District’s 2032 climate and energy goals.

A central instrument needed is a carbon price. The “Put A Price On It, DC” coalition has proposed a carbon fee-and-rebate policy in a draft bill called the “Climate and Community Reinvestment Act of DC” as a key tool to meet our goals. But before getting into that, let’s go over how DC is off track.

Clean Energy DC Plan

The Clean Energy DC plan has three main goals: reduce GHG emissions, reduce energy consumption, and increase renewable energy.

Meeting these goals in DC hinges on the origin and consumption of energy. This is because the majority of DC energy is still sourced from fossil fuels. The share of electricity provided by natural gas grew by 62 percent from 2013 to 2016. This growth was driven by the economics of cheap natural gas, and it only demonstrates the power of a simple price signal: the least expensive energy source will win. Carbon pricing can bring about another shift — a shift to renewable energy.

The Clean Energy DC plan is heading in the right direction. It focuses on improving building energy efficiency, transportation, and energy supply. Unfortunately, it does not outline in detail any mechanisms that will accomplish the targets set by Mayor Bowser and the DOEE.

There is the additional dilemma before us that there is currently no plan to achieve the 80 percent by 2050 goal, and that C40 in their Deadline 2020 called on cities in developed nations that also have healthy economies to have more ambitious date targets. DC’s goals are not aggressive enough as they stand, and they certainly cannot be met with the structures in place.

Reduce GHG emissions

There are many questions raised when considering DC’s plan to reduce GHG emissions. This is a testament to how little the District has accomplished in terms of energy efficiency and local (renewable) generation. Even though there has been a significant decrease since 2006 due to the switch from coal to natural gas, these methane-driven emission reduction claims should be viewed with skepticism. The Environmental Defense Fund reported that emissions of natural gas (methane), which is upwards of 86 times stronger than carbon dioxide, are dramatically higher than official accounts. In Pennsylvania, which is within the grid that powers DC, fugitive methane emissions cause the same near-term climate pollution as 11 coal-fired power plants.

Even if the accounting behind DC’s climate progress were trustworthy, it is highly unlikely that the rapid decline in emissions will continue without substantive new policy interjections. According to the Clean Energy DC plan the 50 percent goal can be met. However, at least 25 percent of the policies cited have not been introduced.

A sizeable amount of GHG reductions to meet the 50 percent 2032 goal are cited as coming from the federal Corporate Average Fuel Economy (CAFE) Standard which is under threat. The District is resisting this rollback, but the details on actual emission reductions, enforcement and monitoring remain unclear.

An additional 6.4 percent comes from assumed changes in transportation changes, designated above as “mode share.” This transition would require 50 percent of people to use transit, 25 percent to walk or bike, and the remaining 25 percent to be driving.

Three things that are clear about the Clean Energy DC plan: There are too many assumptions, we are trading one fossil fuel for another, and the goals are not on an aggressive enough timeline. Closing the emissions gap demands more ambitious approach. A carbon tax is a sure-fire way to start ACTUALLY making meaningful reductions in emissions.

Energy Use Reductions

As of now the planning for energy use reductions will only result in an 18 percent reduction. This is a large divergence from the 2032 goal of a 50 percent. Similar to the GHG reductions, the projected energy use reduction rely heavily on the federal CAFE standards, accounting for 10.1 percent of the total expected.

A portion of the 32 percent gap can be made up for by implementing a strong carbon price. It would signal a shift of behavioral change and encourage people to be more conscious of their energy consumption by reducing use and looking for more energy efficient alternatives within their own household.

Additionally, revenue from a robust carbon fee would be directed to greenhouse gas reduction programs which focus on energy efficiency, supporting greener buildings, and the installation and modernization of heating, ventilation, and air conditioning, and other large building systems. All of these actions would go a long way in reducing energy use in DC.

Increase Renewable Energy

Unfortunately, the renewable energy projections also fall far from the mark. There is a gap of 18 percent between the goal and current estimates. This is because meaningful action has not yet been taken to increase renewable energy sources.

A more comprehensive and timely solution would couple a strengthened RPS with an equitable carbon price. With an economy-wide fee on carbon pollution, DOEE’s existing work would be supercharged.

Just imagine — when the true cost of fossil fuels is appropriately accounted for, lines will form around the block for programs like Solar for All! Reducing emissions, advancing clean energy in the near term, and closing the gap towards our 2032 goals.

What we’re proposing: Climate and Community Reinvestment Act of DC

The District requires a strong and equitable carbon price to transition to being carbon-free. Fortunately for the DOEE, the Put A Price On It DC coalition has done the planning and analysis to draft a instrument that would put DC on the path to attaining all of its climate goals. A strong, fair and equitable carbon fee-and-rebate policy.

The “Climate and Community Reinvestment Act of DC” would reduce GHG emissions from the use of electricity, natural gas, and home-heating fuel by 23 percent by 2032. Additionally, transportation emissions would fall by approximately 6-10 percent compared to DC’s current level.

In order for a carbon fee to be constructive in meeting the Paris Climate Agreement, it needs to be comprehensive and fair. The set price should be strong enough to catalyze an energy transition and change behavioral patterns of energy consumption. The coalition’s proposal has a price beginning at $20 per ton of carbon dioxide with increases of $10 every year, to eventually reach $150 per ton 2032. A clear price signal will be sent and instantly yield clean energy growth, energy efficient construction, and investments based on behavior-change.

If DC Council passes a carbon pricing bill similar to the coalition bill, the policies outlined in the Clean Energy DC plan would be no longer be simply “figureheads,” they would be achievable and manageable.

In the first year, the coalition carbon fee would generate an estimated $141 million, with economic models predicting that revenue would top off at $596.5 million in 2032.These funds would contribute to electricity system modernization, energy efficiency and renewable energy.

The bill proposed by the “Put A Price On It, DC” coalition is backed by more than 70 organizations, faith groups and businesses. It has received input from hundreds of community leaders, engaged thousands of residents, and is based on science, fairness, durability, and economics.

With multiple apparent gaps in the DOEE plans to meet Mayor Bowser’s and the Districts pledges, another instrument is required to facilitate all three of Clean Energy DC goals: carbon pricing.

What we pass here in DC will have cascading influence on other states and members of Congress. What we pass here in DC needs to be something that will encourage others to follow our lead.

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Images:
Mayor Bowser Featured Image: (Photo credit: Executive Office of Mayor Muriel Bowser/Khalid Naji-Allah)
Mayor Bowser #Women4Climate: Mayor Bowser
Figures 9-11
Paris sign: By Miguel Discart (2017-05-24_19-12-31_ILCE-6500_DSC01230) [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

Climate Activists Welcome Carbon Fee Outline from Mary Cheh, but Say it Must be Stronger and Include Household Rebates

At press conference at Wilson Building: Community leaders say legislation is coming “soon” from Cheh but express fear it will not meet the District’s commitment to the Paris Climate Agreement.

WASHINGTON, DC — More than 100 environmentalists, community leaders and students gathered on the steps of the Wilson Building Tuesday afternoon to welcome a carbon fee proposal from D.C. Councilmember Mary Cheh (Ward 3). But leaders insisted that Cheh’s draft plan to fight climate change was not strong enough, and that it needs a stronger “rebate” feature to protect low- and moderate-income households.

Cheh, who chairs the Committee on Transportation and the Environment, floated a carbon “pricing” draft outline to environmental and business leaders late last month. Her stated goal is to convert the outline into a fully introduced bill “soon” for the full Council to consider. Cheh’s framework proposes a starting fee of $10 per ton of carbon pollution that increases to $100 per ton by the year 2038.

At the Tuesday press conference at the Wilson Building, activists thanked Cheh for pushing forward with this state-level proposal to put a “price” on climate pollution. But the proposed carbon fee is too low to effectively cut carbon in the city in line with DC’s commitment to the Paris Climate Agreement, they argued. And they say Cheh and other Council leaders must commit to a transparent way of sharing the majority of carbon revenues with DC residents.

As an alternative, environmental leaders pointed to their own draft legislative proposal, crafted over a two-year period by groups in the 70-member “Put A Price On It, D.C.” coalition. Their plan begins with a $20 per ton tax and increases to $150 per ton by 2032. Further, the coalition’s proposal also rebates the majority of all revenue collected to DC residents in an economically transparent and equitable way. Leaders called on Cheh to significantly strengthen her carbon proposal before any bill introduction and to explicitly dedicate most of the revenue to rebates.

Read more about the differences between Cheh’s proposal and the coalition’s proposal here.

“If we don’t take strong climate action now, we’ll be on the path to an economic catastrophe,” said Tom Matzzie, Founder & CEO of CleanChoice Energy, who did not speak at the press conference. “Fossil fuels shouldn’t get away with pollution without paying for their mess. We need a level playing field for renewable energy “

“Long-time DC residents will suffer the most from the impacts of climate change,” said Kymone Freeman, Co-Founder of We Act Radio. “There is no more time to wait. We need a carbon pricing policy that is strong and fair, and brings justice to D.C.’s frontline communities.”

“We have to lower our consumption of fossil fuels to mitigate climate change and ensure we have a planet that will support human life in the future,” said Judith Howell, a security officer in the District and a member of the SEIU 32BJ union. “But we must do that in a way that doesn’t put the entire burden on working families.”

“I’m calling as a faith leader for polluters to take responsibility for the harm that their pollution is causing for the ‘least of these.’”  said Rev. Danté King from Forward Church and Director of Community Engagement at the community solar nonprofit Groundswell. “A fair and equitable carbon price policy — one that includes a progressive rebate — would reflect our city’s values and become a source of hope in our warming world.”

“Delayed action multiplies the fatal consequences of climate change,” said Camila Thorndike, Carbon Pricing Director at CCAN Action Fund. “District residents and leaders have been asking for a carbon fee for over three years, and we expect a strong bill introduced before summer recess.”

The District government currently has a goal — called the “Sustainable DC 2.0” plan — of reducing carbon emissions in the city by 50 percent by 2032. And in June 2017, Mayor Bowser publicly pledged to uphold the goals of the Paris climate accord by reducing citywide emissions by 80 percent by 2050. However, D.C. is currently not on track to meet those goals. The proposal put forth by the “Put A Price On It, D.C.” coalition would reduce carbon emissions 23 percent by 2032, putting the District on track to achieve its climate goals.

You can read a summary and the full text of the coalition bill here, and read an initial analysis of Cheh’s alternate proposal here.

The “Put A Price On It, D.C.” coalition is comprised of 70 climate and justice advocacy organizations, including more than a dozen local businesses.

CONTACT:
Jamie DeMarco, Citizens Climate Lobby, jamie@citizensclimatelobby.org, 443-845-5601
Denise Robbins, CCAN Action Fund, Communications Director, denise@chesapeakeclimate.org, 608-620-8819
Camila Thorndike, CCAN Action Fund, Carbon Pricing Director, camila@chesapeakeclimate.org, 541-951-2619

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Students and Teachers join Climate Advocates to Rally for Strong, Progressive Carbon Rebate Policy as D.C. Council Introduction Date Nears

Carbon fee-and-rebate policy proposed to be introduced June 5; advocates rally for a policy that is equitable and fair

Washington, DC — Dozens of students, teachers, and climate and justice advocates will join together for a rally on April 13 at 12:30pm to urge the D.C. Council to introduce a strong, progressive carbon fee-and-rebate policy. On the steps of the Wilson Building, middle school students and teachers will be joined by members of the “Put A Price On It, D.C.” coalition, which consists of 70 local organizations and businesses, to speak out in favor of the proposed policy. They will be surrounded by giant clocks noting that “time is running out” for strong climate action. At least 25 students from D.C. middle schools and universities are expected to attend, with three middle schoolers as speakers.

D.C. Councilmember Mary Cheh (Ward 3) has indicated that she will introduce the bill on June 5. The proposed carbon fee-and-rebate policy would place a fee on carbon pollution in the District and rebate a majority of revenue raised back to D.C. residents. The speakers will call on D.C. Councilmembers to ensure that the bill includes a progressive rebate to benefit all D.C. residents, especially the poor, when it is introduced.

WHAT: Climate Day of Action: DC Youth Rally for a Carbon Price
WHERE: Front steps of the John A. Wilson Building (1350 Pennsylvania Ave NW, Washington DC)
WHEN: Friday, April 13, 12:30pm
SPEAKERS:
– Three D.C. middle school students
– Payal Shah, Moms Clean Air Force
– Riley Place, Generation E PAC
– Kymone Freeman, founder of We Act Radio
-Camila Thorndike, CCAN Action Fund

Advocates for the proposed policy say the campaign has new momentum this spring. In autumn, Mary Cheh, head of the Committee on Transportation & the Environment, told a crowd of Ward 3 Democrats that the proposed carbon fee-and-rebate policy is a “fabulous concept” that will “have to have Council support and the mayor’s support – and [it] will.” The coalition expects a bill to be introduced early this summer with the majority support of the Council.

The “Put A Price On It, D.C.” coalition is comprised of 70 climate and justice advocacy organizations, including more than a dozen local businesses.

CONTACT:
Denise Robbins, Communications Director, denise@chesapeakeclimate.org, 608-620-8819
Camila Thorndike, Carbon Pricing Director, camila@chesapeakeclimate.org, 541-951-2619.

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